Nifty, Sensex Extend Losses as Financials Drag, IT and Auto Buck Trend

Indian equities remained under pressure into early afternoon trade on Friday, August 7, as weakness in financial stocks and elevated crude oil prices weighed on sentiment. Around noon, the Sensex was down 432 points, or 0.55 per cent, at 78,521.95, while the Nifty 50 declined 75 points, or 0.30 per cent, to 24,561. The weakness persisted thereafter, with the Nifty hovering near the 24,550 mark.

The broader market showed a mixed trend. The Nifty Midcap index was up around 0.3 per cent in the morning trade, while the Small-Cap index slipped around 0.1 per cent. Bank Nifty remained under pressure near the 57,900 zone as selling in heavyweight private financial stocks capped the index.

Sectorally, Nifty IT emerged as the strongest pocket, rising around 2 per cent, while Nifty Auto also traded firmly and Realty remained in positive territory. The weakness was concentrated in financials. Nifty Financial Services fell around 0.8 per cent, while banking and private bank indices traded in the red. Cement stocks also witnessed selling pressure. Concerns around an RBI draft proposal related to revolving-credit products for non-banking financial companies added to the pressure on financial shares.

Stock-specific action remained strong amid the weak benchmark trend. Samvardhana Motherson International jumped more than 7 per cent following its Q1 earnings announcement. Britannia Industries gained around 4 per cent after reporting quarterly profit growth and healthy volume performance. On the other hand, Bajaj Finance fell more than 5 per cent as investors reacted to the RBI's draft proposal for NBFC credit products. Trent declined around 2.8 per cent despite reporting a 22 per cent rise in quarterly profit, as its revenue growth came in below medium-term expectations.

Institutional flows offered some support in the previous session. On August 6, foreign institutional investors were marginal net sellers of Indian equities worth Rs 18 crore, while domestic institutional investors remained strong buyers with net purchases of Rs 4,014 crore. Final FII and DII cash-market numbers for August 7 will be available after the market closes.

Global cues were mixed. The MSCI Asia-Pacific index excluding Japan slipped around 0.1 per cent, while Japan's Nikkei and South Korea's Kospi declined around 0.5 per cent each. China's CSI 300, however, gained around 0.8 per cent. Brent crude rose 1.5 per cent to around USD 83.78 per barrel, adding to concerns for oil-importing India. US index futures were largely flat ahead of the US jobs report, where economists expect around 80,000 payroll additions and an unemployment rate of 4.2 per cent.

For the remainder of the session, the 24,600 level remains crucial for the Nifty, with the 24,700 to 24,800 zone acting as an immediate hurdle. A sustained move below 24,600 could keep the index under pressure. Investors will also track Q1 earnings from SBI, Titan and other major companies, along with the US employment data for fresh cues on the Federal Reserve's policy outlook.

Market movements remain sensitive to earnings, crude oil prices and global macro developments.

Disclaimer: The article is for informational purposes only and not investment advice.